United States District Court, District of Columbia
UNITED STATES OF AMERICA, ex rel., BRIDGETTE CARMICHAEL, Plaintiff,
RAYMOND GREGORY, Defendant.
MEMORANDUM OPINION, [DKT. # 23]
RICHARD J. LEON UNITED STATES DISTRICT JUDGE.
Court entered default judgment against defendant Raymond
Gregory ("Gregory") in this case on September 6,
2017. One year later, Gregory filed a Motion for Relief from
Default Judgment Pursuant to Federal Rule of Civil Procedure
60 ("Def.'s Mot.") [Dkt. # 23]. For the reasons
that follow, Gregory's motion must be DENIED.
October 10, 2014, the relator, Bridgette Carmichael
("Carmichael"), sued Gregory, alleging that he had
unlawfully overcharged her for rent while she was living in a
residential property he owned. See Compl.
¶¶ 28-30, 47-63 [Dkt. # 1]. Carmichael and Gregory
initially agreed to set her rent at $1, 800 per month.
See Def.'s Mot., Gregory Affidavit ¶ 7.
They submitted their proposed lease to the District of
Columbia Housing Authority ("DCHA"), whose approval
was necessary because Carmichael received rent assistance
through the Department of Housing and Urban Development's
("HUD's") Section 8 Housing Choice Voucher
Program. See Id. ¶7; Compl. ¶¶ 7-19.
DCHA reviewed the lease, lowered the monthly rent to $1, 603,
and prescribed how much of the $1, 603 Carmichael would be
responsible for paying each month. See Def.'s
Mot., Gregory Affidavit ¶ 8; U.S. Opp. to Def.'s
Mot. for Relief from Default J. ("Opp. to Def.'s
Mot."), Ex. A [Dkt. # 26]. Gregory and
Carmichael expressly accepted DCHA's changes. They
executed a contract that provided Gregory could not
charge more than $1, 603 in monthly rent without DCHA
approval. See U.S. Compl. in Intervention ¶ 38
[Dkt. # 12]. And DCHA never approved a rent increase during
Carmichael's tenancy. See United States ex rel
Carmichael v. Gregory, 270 F.Supp.3d 67, 69-70 (D.D.C.
2017) ("Gregory 7").
complaint, Carmichael alleged that, despite the express
agreement, Gregory increased her rent to an amount that
exceeded the DCHA-approved amount, and charged her excess
rent every month from October 2008 through August 2013.
See Compl. ¶¶ 37-40. Her allegations are
supported by two leases, signed by both Gregory and
Carmichael, that reflect rents that were never approved by
DCHA. The first lease, effective October 1, 2008, sets
Carmichael's rent at $1700 per month. See Mot.
for Default J., Ex. 6 [Dkt. #17]. The second, effective July
6, 2012, sets rent at $1653 per month. See id., Ex.
complaint alleges that, by overcharging her for rent, Gregory
violated the False Claims Act ("FCA"), 31 U.S.C.
§ 3729 et seq., and thereby unjustly enriched
himself. See Compl. ¶¶ 47-63.
The FCA, she contends, is implicated by the fact that
Gregory, after overcharging Carmichael, endorsed housing
assistance checks and then presented them for payment.
See Id. ¶¶ 47-57. Presenting the housing
assistance checks for payment constituted "requests to
DCHA for payment of federal funds provided by HUD."
Gregory I, 270 F.Supp.3d at 71. Doing so after
falsely certifying compliance with the terms of the housing
assistance program violates the FCA. See id.; Doe v.
Gormley, No. 15-2183, 2016 WL 4400301, at *5 (D. Md.
Aug. 17, 2016) (collecting cases).
Carmichael brought her suit under the FCA's qui
tarn provisions, the United States ("the
Government") had a right to intervene as a party.
See Compl. at 1; 31 U.S.C. § 3730(b)(2). The
Government elected to exercise that right on September 23,
2015, see U.S. Notice of Election to Intervene [Dkt.
# 9], and filed its Complaint in Intervention on
March 25, 2016. The Government's complaint alleged two
claims against Gregory, both for violating the FCA.
See U.S. Compl. in Intervention ¶¶ 52-65.
did not answer either complaint. As a result, on May 18,
2016, the Clerk of Court declared him in default. See
Gregory I, 270 F.Supp.3d at 70. On February 17, 2017,
the Government and Carmichael moved for entry of default
judgment on the first FCA claim in the Government's
complaint. See Mot. for Default J. at 1 & n.1,
18. And on September 5, 2017, 1 granted that motion. See
Gregory I, 270 F.Supp.3d at 72. I found that
"Gregory was served [with process] on January 26,
2016," and that "the well-pleaded facts in the
United States' complaint are sufficient to establish
liability for violations of the FCA." Id..at
70-71. I then "enter[ed] default judgment in favor of
the United States in a total amount of $587, 999.00."
Id. at 72. Carmichael, in turn, was awarded "15
percent of any sums collected by the United States," as
she was entitled under the FCA's qui tarn
one year after default judgment was entered, Gregory appeared
for the first time in this action by filing a motion to
vacate the default judgment under Federal Rule of Civil
Procedure 60. See Def s Mot. at 10. Gregory somehow
claims to have not received actual notice of this proceeding
until the Government served him with a Notice of Default in
May of 2016. See Def.'s Mot., Gregory Affidavit
¶ 19. After learning of his default, Gregory retained H.
Caleb Griffin to represent him. See Def.'s Mot.,
Griffin Affidavit ¶¶ 1-5. Griffin neither appeared
in, nor filed any paper related to, this case until September
6, 2018-more than two years after he was retained-when he
filed Gregory's motion to vacate the judgment. In an
affidavit, Griffin provides several personal and professional
reasons that delayed his appearance. See Id.
¶¶ 9-19. The reasons range from his need to seek
admission to this Court's bar, to a lack of professional
resources, to deaths in his family. See id.
motion, Gregory argues that the default judgment should be
vacated under Rules 60(b)(1), 60(b)(3), and 60(b)(6) because
his failure to answer was the result of excusable neglect,
because the judgment is based on misrepresentations made by
Carmichael, and because the judgment imposes harsh
consequences. See Def.'s Mot. at 5-11. The
Government opposes all three of Gregory's theories for
relief. See Opp. to Def.'s Mot. at 12-21. And
ultimately, I have similarly concluded that Gregory is not
entitled to Rule 60 relief under any theory. How so?
Gregory Has Not Established a Potentially Meritorious
Circuit, "a potentially meritorious defense is a
precondition for Rule 60(b) relief." FG Hemisphere
Assocs., LLC v. Democratic Republic of Congo, 447 F.3d
835, 842 (D.C. Cir. 2006). This requirement ensures
"that vacating the judgment will not be an empty
exercise or a futile gesture." Id. (quoting
Murray v. District of Columbia, 52 F.3d 353, 355-56
(D.C. Cir. 1995)). It does not impose "a high bar"
on movants: "even a hint of a suggestion which, proven
at trial, would constitute a complete defense" will
suffice. Marino v. DEA, 685 F.3d 1076, 1080 (D.C.
Cir. 2012) (quotation marks and citations omitted). But
"the party seeking to invoke Rule 60(b), bears the
burden of establishing that its prerequisites are
satisfied." Owens v. Republic of Sudan, 864
F.3d 751, 819 (D.C. Cir. 2017) (quotation marks and citations
omitted). And "proposed . . . defenses [that]
'amount to nothing more than conclusory
denials'" do not carry that burden. Nat'l
Rest. Ass 'n Educ. Found, v. Shain, 287 F.R.D. 83,
88 (D.D.C. 2012) (quoting Gillespie v. Capitol
Reprographics, LLC, 573 F.Supp.2d 80, 87 n.l 1 (D.D.C.
2008)). The only evidence that Gregory attaches, however, to
his Rule 60 motion is bank statements from 2012 and 2013, an
affidavit reciting Gregory's side of the story, and
correspondence regarding Carmichael's claims against him.
See Def.'s Mot., Exs. A-F & Gregory
Affidavit. This evidence, however, is either consistent with
Carmichael's allegations or entirely conclusory. To say
the least, it does not establish a potentially meritorious
bank statements, for example, are consistent with
Carmichael's claims that she was overcharged for rent.
The statements date back to June of 2012, when
Carmichael's DCHA-approved share of the rent was $18 of
the $1, 603 total. See Opp. to Def.'s Mot., Ex.
A. According to Gregory's submission, Carmichael paid him
$140 that month, almost ten times what she owed for the
month's rent. See Def.'s Mot., Ex. A. The
next month, July 2012, Carmichael's approved share of the
rent increased to $238 per month. See Opp. to
Def.'s Mot., Ex. A. She also signed a new lease with
Gregory in July 2012, setting the overall rent for the
residence at $1, 653 per month, $50 higher than what DCHA
approved. See Mot. for Default J., Ex. 9. Several ...